Financial Daily from THE HINDU group of publications
Wednesday, May 11, 2005
Financial Daily from THE HINDU group of publications Wednesday, May 11, 2005 |
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Corporate
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Outlook LML plans 100 cc bike launch in August Our Bureau
New Delhi , May 10 HAVING completed its financial restructuring, LML Ltd today announced that it would introduce a 100 cc motorcycle in August and roll out four-stroke scooter models by next year in order to boost sales. LML currently makes motorcycles in the 110 cc, 125 cc and 150 cc segments. "In order to capture a market share of 10 per cent in the next 3-4 years, the company also plans to expand its production capacity for four-stroke two-wheelers to 720,000 units by March 2007," said Mr Deepak Singhania, Managing Director. LML would double the capacity for motorcycles to 400,000 units by October to meet demand. Further, as part of its expansion plan, the company's existing production facilities - which have an annual capacity of 450,000 units for two-stroke geared scooters - will be restructured to produce both four-stroke geared and gearless scooters in the next two years. The company is also opting for a professional management team, including CEO and COO. The company, which had been struggling with heavy debt, completed its financial restructuring in March, through which it raised fresh funds of nearly Rs 228 crore via the issuance of equity and preferred shares and convertible bonds to overseas investors such as Credit Suisse First Boston. The company has also reduced its debt to around Rs 108 crore from Rs 310 crore. The restructuring has reduced the stake of LML's promoters - the Singhania family - in the company to 41 per cent from 50 per cent, while the rest is divided between institutional investors and the public, Mr Singhania said. In addition, LML is aiming to make a mark in the export markets, which the company expects will account for about 10 per cent of sales in the next 4-5 years. "We are looking at assembling partnerships in Columbia or Brazil, and Egypt. We will be investing with a local partner, though our ownership will be nominal," Mr Singhania said.
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